AstraZeneca plc (ADR) (NYSE: AZN) shares are currently trading at a discount to S&P 500 pharma companies. Argus’ John Eade believes the discount is too steep given the company’s pipeline potential.

Eade upgraded the rating on the company to Buy with a price target of $38.

Coping With Challenges

“While most companies in the Big Pharma group have moved beyond the patent cliff phase and are beginning to grow, AstraZeneca has lagged, as it faces pricing pressure and generic threats to its former blockbusters Nexium (for ulcers) and Crestor (for high cholesterol),” the analyst mentioned.

However, Eade noted management was taking steps address the challenges being faced by AstraZeneca by cutting costs and creating a robust new drug pipeline, which includes “a promising checkpoint inhibitor to treat various cancers.”

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